Health at a Glance: Europe 2016
State of Health in the EU Cycle
© OECD/European Union 2016
Chapter 1
The labour market impacts of ill-health
This chapter looks at the labour market impacts of chronic diseases and related
behavioural risk factors, including obesity, smoking, and harmful alcohol
consumption. Chronic diseases lead to the premature death of more than
550 000 people aged 25 to 64 each year across EU countries, resulting in the loss of
some 3.4 million potential productive life years. Chronic diseases such as
cardiovascular diseases, respiratory problems, diabetes, and serious mental health
problems also have important labour market impacts for people living with these
conditions: reduced employment, earlier retirement, and lower income. Using the
latest data from the SHARE survey (Survey of Health, Ageing and Retirement in
Europe), this chapter shows that the employment rate of people aged 50-59 who
have one or more chronic diseases is lower than that of people who do not suffer
from any disease. The same is true for people who are obese, smokers, or heavy
alcohol drinkers. The labour market impacts of mental health problems such as
depression are also large: across European countries, people aged 50-59 suffering
from severe depression are more than two times more likely to leave the labour
market early. The burden of ill-health on social benefit expenditures is huge: 1.7% of
GDP is spent on disability and paid sick leave each year on average in EU countries,
more than what is spent on unemployment benefits. Greater efforts are needed to
prevent chronic diseases among the working-age population, and better integration
is needed between health and labour market policies to reduce the detrimental
labour market impacts of ill-health, and thus contribute to better lives and more
inclusive economies.
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THE LABOUR MARKET IMPACTS OF ILL-HEALTH
Introduction
Health and work are interrelated in many ways: health problems can reduce labour market
participation and income, and conversely, bad employment conditions or unemployment can
negatively affect physical and mental health.
This chapter assesses the labour market outcomes of people with chronic (non-communicable)
diseases (such as cardiovascular diseases, diabetes, cancer, musculoskeletal diseases, and mental
health conditions) and related behavioural risk factors (such as obesity, tobacco and harmful alcohol
use). Chronic diseases and related behavioural risk factors may result in the premature death of
people still in their working age or reduce their employment prospects and earnings. Ill-health can
cause recurrent sick leave or long-term absence from work, and increases the probability of early exit
from the labour force. This can result in increased welfare payments for disability, sick leave,
unemployment, or early retirement.
Preventing chronic diseases through properly designed public health and prevention policies
may lead to substantial economic and employment benefits via a healthier and more active
workforce. Through closer integration, health policies and labour market policies can also play an
important role in reducing the detrimental labour market impacts of ill-health, and contribute to
better lives and more inclusive economies.
This chapter reviews the latest evidence on the impacts of chronic diseases and related
behavioural risk factors on labour market outcomes in European countries, building on previous OECD
work (Devaux and Sassi, 2015). Eurostat data on mortality are used to estimate the number of potential
productive years of life lost due to non-communicable diseases (NCDs) among the working-age
population. The chapter also analyses the latest results from the Survey of Health, Ageing and
Retirement in Europe (SHARE) to assess the labour market impacts of people living with chronic
diseases and related risk factors. Labour market outcomes include employment status, productivity
measures such as absence from work due to sickness and wages, and early exit from work.
Chronic diseases cause many premature deaths and a huge loss in potential productive
life years
This section provides some estimates of the number of premature deaths due to NCDs among
the working-age population and how this translates into the loss of potentially productive life years.
The approach is based on some fairly simple and crude calculations, not accounting for all the
productive life years lost due to greater morbidity and disability (which is discussed in the following
sections, using a different dataset).
In the European Union, about 555 000 people aged 25 to 64 died from major NCDs (cardiovascular
diseases, cancers, respiratory diseases, and diabetes) in 2013. This corresponds to a rate of about
200 per 100 000 population in this age group (Table 1.1). Premature mortality rates from NCDs among
the working-age population were particularly high in Bulgaria, Hungary and Latvia (with a rate at
least two-times greater than the EU average).
Assuming that these people would have been employed until age 65 at the same employment
rate as the rest of the population, the associated potential loss for the economy is estimated to be
around 3.4 million potentially productive life years across the 28 EU countries in 2013. This
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THE LABOUR MARKET IMPACTS OF ILL-HEALTH
Table 1.1. Premature deaths and potential productive life years lost related
to non-communicable diseases among people aged 25-64, EU countries, 2013
Premature NCD deaths
EU28 total
Potential productive life years lost
Number
Rate per 100 000 population
Number
Rate per 100 000 population
555 065
201
3 412 060
1 236
Austria
7 736
165
47 694
1 018
Belgium
10 307
173
62 115
1 042
Bulgaria
16 828
410
103 766
2 527
Croatia
6 894
293
40 015
1 701
Cyprus
558
116
3 786
789
14 711
244
79 195
1 316
Denmark
5 177
178
29 755
1 023
Estonia
2 013
280
11 230
1 562
Finland
4 961
174
27 997
980
France
57 318
169
355 707
1 046
Germany
86 545
195
522 522
1 179
Greece
11 325
188
76 390
1 270
Hungary
22 947
411
129 389
2 319
3 564
143
24 014
966
48 231
147
312 026
952
Latvia
4 439
400
29 731
2 682
Lithuania
Czech Republic
Ireland
Italy
5 910
372
39 220
2 466
Luxembourg
450
147
2 961
969
Malta
368
159
2 063
889
Netherlands
15 618
173
94 067
1 042
Poland
67 050
305
378 167
1 722
Portugal
9 827
170
66 294
1 147
Romania
40 621
361
247 952
2 203
Slovak Republic
9 148
289
53 324
1 685
Slovenia
2 380
200
13 384
1 122
38 003
142
256 969
960
6 726
138
40 104
821
55 410
166
362 228
1 084
Spain
Sweden
United Kingdom
Note: Non-communicable diseases include cardiovascular diseases (ICD-10: I00-I99), cancers (C00-C97), respiratory diseases
(J40-J47), and diabetes (E10-E14). Potential productive life years have been calculated as the difference between the age of death
and age 65, using the EU28 average of employment rates for the population aged 25-54 years and 55-64 years.
Source: OECD estimates based on Eurostat data.
1 2 http://dx.doi.org/10.1787/888933430238
corresponds to a rate of 1 236 productive life years per 100 000 population in that age group. Based on
the average annual earnings of workers in EU countries of about EUR 33 800, this amounts to
EUR 115 billion in potential economic loss each year (or 0.8% of GDP in the European Union).
Most premature deaths due to NCDs were for people aged 45-64. In 2013, about 508 000 people
aged 45-64 died from NCDs in the EU. This corresponds to a loss of some 2.5 million potentially
productive life years.
Chronic diseases and related behavioural risk factors reduce employment
In most cases, people of working age do not die from chronic diseases, but continue to live with
them for several years (sometimes for the rest of their lives), with more or less severe levels of
morbidity and disability. This section focuses on the employment impacts of chronic diseases and
related risk factors such as obesity, smoking, and heavy alcohol drinking. Descriptive analyses are
supplemented with econometric analysis of longitudinal survey data when possible to address at
least partly possible reverse causal links (Box 1.1).
HEALTH AT A GLANCE: EUROPE 2016 © OECD/EUROPEAN UNION 2016
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Box 1.1. Assessing the impact of nonfatal health outcomes of chronic diseases
on labour market outcomes: Methodological challenges and data sources
The link between health and work is complex and difficult to explore because of its two-way causal
relationship. The rest of this chapter illustrates this relationship using the latest data available for a
large number of European countries, and aims to measure the impacts of health on labour market
outcomes using econometric analysis to partly control for reverse causal links where possible.
Longitudinal data with information on both health (diseases and behavioural risk factors) and
labour market outcomes were used for the causal analysis. The analysis used the two most recent
waves of the Survey of Health, Ageing and Retirement in Europe (SHARE) in 2011 and 2013. The SHARE
collects information on employment, retirement, chronic diseases diagnosed by a doctor (such as
high blood pressure, diabetes, cancer, chronic lung disease, heart problems, stroke, arthritis, and
ulcer), and health behaviours (such as obesity, smoking and alcohol drinking) among people aged 50
and over. The analysis is restricted to the population aged 50-59.
An econometric analysis based on longitudinal data from the SHARE assesses the impact of
ill-health on labour market outcomes, at least partly addressing the endogeneity issue due to reverse
causality. Logistic and negative binomial regression models accounting for clusters by country are
used to assess the effect of lagged health outcomes (in 2011) on current labour market outcomes
(in 2013). The control variables include: behavioural risk factors, age, age squared, marital status,
education level, and country fixed effects. Further details (e.g. definition of variables, sample size) are
provided in endnotes.
The rest of this chapter also provides some insights on the value of production potentially lost from
illness due to adverse labour market outcomes. The evidence comes from many national or
international studies using different definitions and valuation methods. The results are therefore not
always strictly comparable across countries.
People with chronic diseases have lower employment rates
People with chronic diseases have reduced employment prospects, in part because they leave
employment earlier or have greater difficulties re-entering the job market. Figure 1.1 shows that
among people aged 50-59, 70% of those with one chronic disease and 52% of those with two or more
chronic diseases1 were employed in 2013, versus 74% of those with no chronic disease, on average
across 14 European countries. Similar patterns are observed in virtually all 14 European countries.
Figure 1.2 shows significant differences for both men and women in the probability of being
employed in 2013 depending on their chronic disease status in 2011. All things being equal, among
people aged 50-59 in 2013, 83% of men without any chronic disease in 2011 were employed in 2013
compared to 74% of men with one chronic disease and 61% of those with two or more chronic
diseases (respectively, 72%, 63%, and 48% among women).
Evidence for the effect of specific chronic diseases on employment is scarce in the economic
literature, with some exceptions for diabetes, cancer, musculoskeletal diseases, and mental illness.
Diabetes is generally associated with a lower probability of employment. A recent cross-country
study found that diabetes is associated with a 30% increase in the rate of labour-force exit across
16 European countries; at the national level, this association is significant in nine out of these
16 countries (Rumball-Smith et al., 2014). The impact of diabetes on employment depends heavily on
the severity of the disease.
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THE LABOUR MARKET IMPACTS OF ILL-HEALTH
Figure 1.1. Employment rate among people aged 50-59, with and without chronic diseases,
14 European countries, 2013
No chronic disease
1 chronic disease
2 and more
Employment rate (%)
100
80
60
40
nm
ar
k
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De
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Note: N = 17 666 in the 14 countries studied. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (wave 5).
1 2 http://dx.doi.org/10.1787/888933428282
Figure 1.2. Probability of being in employment among people aged 50-59 in 2013,
by chronic diseases in 2011, aggregate results for 13 European countries
No chronic disease in 2011
1 chronic disease
2 and more
% employed in 2013
100
90
80
70
60
50
40
Men
Women
Note: Excludes Luxembourg because it was not included in SHARE wave 4. N = 1 813 for men and N = 2 606 for women.
95% confidence intervals represented by H. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (waves 4 and 5).
1 2 http://dx.doi.org/10.1787/888933428290
As expected, cancer has a negative impact on employment probability. In Denmark, the
probability of exiting the labour force increases by 5 to 10 percentage points three years after
diagnosis among people with cancer compared to cancer-free people (Heinesen and Kolodziejczyk,
2013). Similarly, in France, 77% of people remained in employment two years after a cancer diagnosis
compared to 94% of people without cancer (INCa, 2014).
HEALTH AT A GLANCE: EUROPE 2016 © OECD/EUROPEAN UNION 2016
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A corrigendum has been issued for this page. See:
http://www.oecd.org/about/publishing/Corrigendum-HealthataGlanceEurope2016.pdf
1.
THE LABOUR MARKET IMPACTS OF ILL-HEALTH
People with musculoskeletal diseases generally have lower employment rates and are more
likely to leave employment early compared to people without such musculoskeletal problems. For
example, a cohort study in the United Kingdom shows that a third of people who had symptoms of
arthritis left work due to ill health (Oxford Economics, 2010).
People with mental health problems face a considerable employment disadvantage, are much
less likely to be employed, and face much higher unemployment rates than people without mental
health problems. The employment rate of people with severe mental disorders is 30 percentage
points lower and the rate of those with mild-to-moderate mental health problems 10-15 percentage
points lower (OECD, 2012). Unemployment rates of people with severe mental health problems
are three to four times larger than those for people with no mental disorder. For people with
mild-to-moderate disorders, this rate is on average almost twice the rate for people with no mental
disorder (OECD, 2012).
Obese people are less likely to be employed than normal-weight people
Obese people are less likely to be employed than normal-weight people, although the association
between obesity and labour market outcomes varies by gender and job characteristics (such as jobs
requiring social skills or contact with clients and other types of occupations). Obese women are
generally more penalised than obese men (e.g. Mosca, 2013 for Ireland; Lundborg et al., 2010 for
Sweden). Figure 1.3 shows that among people aged 50-59, 59% of those obese were employed in 2013
versus 72% of those non-obese, on average across 14 European countries. Lower proportions of
employment among obese people are consistently observed in all the countries studied.
Figure 1.3. Employment rate among people aged 50-59, by obesity status,
14 European countries, 2013
Non-obese
Obese
% employed in 2013
100
90
80
70
60
50
en
ed
Sw
nd
la
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it z
Sw
nm
ar
k
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De
an
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la
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Ge
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s
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Ne
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Fr
an
m
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lg
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Be
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Av
m
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Lu
Cz
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h
bo
Re
ur
p.
ly
It a
ria
st
Au
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Sl
ov
en
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ai
Sp
Es
to
ni
a
40
Note: N = 17 398 in the 14 countries studied. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (wave 5).
1 2 http://dx.doi.org/10.1787/888933428305
An econometric analysis2 exploring the impacts of obesity on employment in 2013, net of the
impacts of smoking and chronic diseases, shows that being obese in 2011 contributed to lower
probabilities of employment in 2013 in men and women, although the relationship is not significant
in men (Figure 1.4). All things being equal, 77% of men and 61% of women who were obese in 2011
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THE LABOUR MARKET IMPACTS OF ILL-HEALTH
Figure 1.4. Probability of being employed among people aged 50-59 in 2013,
by obesity status in 2011, aggregate results for 13 European countries
Non-obese in 2011
Obese in 2011
% employed in 2013
100
90
80
70
60
50
40
Men
Women
Note: Excludes Luxembourg because it was not included in SHARE wave 4. N = 1 813 for men and N = 2 606 for women.
95% confidence intervals represented by H. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (waves 4 and 5).
1 2 http://dx.doi.org/10.1787/888933428319
were employed in 2013 compared to 78% of men and 67% of women of normal weight. Among these
people, some remained in employment and others re-entered the labour market. Obesity negatively
affects both job retention and job return, but the relationship is not statistically significant.
Smokers have lower employment rates than non-smokers
Smoking is likely to affect employment status because of the well-known adverse health effects.
Figure 1.5 shows that among people aged 50-59, 62% of current smokers were employed in 2013
versus 73% of non-smokers, on average across 14 European countries.
Figure 1.5. Employment rate among people aged 50-59, by smoking status,
14 European countries, 2013
Non-smoker
Smoker
Employment rate (%)
100
90
80
70
60
50
en
ed
Sw
nm
ar
k
nd
De
la
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Fr
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Cz
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It a
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Au
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Sp
Lu
Sl
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40
Note: N = 17 514 in the 14 countries studied. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (wave 5).
1 2 http://dx.doi.org/10.1787/888933428324
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Using data from the SHARE (see endnote 2), Figure 1.6 shows significant differences in
employment in 2013, by smoking status in 2011, for both men and women, suggesting that smoking
contributes to lower employment opportunities. However, other studies only find a fairly small
negative effect of smoking on the probability of employment (Schunck and Rogge, 2012) except for
heavy smokers (Jusot et al., 2008). It is worth noting that differences by smoking status do not
significantly affect whether one remains in employment or returns to employment.
Figure 1.6. Probability of being in employment among people aged 50-59 in 2013,
by smoking status in 2011, aggregate results for 13 European countries
Non-smoker in 2011
Smoker in 2011
% employed in 2013
100
90
80
70
60
50
40
Men
Women
Note: Excludes Luxembourg because it was not included in SHARE wave 4. N = 1 813 for men and N = 2 606 for women.
95% confidence intervals represented by H. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (waves 4 and 5).
1 2 http://dx.doi.org/10.1787/888933428335
Heavy alcohol drinkers are less likely to be employed than light-moderate drinkers
The impact of alcohol consumption on labour market outcomes is strongly affected by the
quantity consumed and the pattern of consumption. The relationship between problematic alcohol
consumption and employment is complex, with possible reverse causality as unemployment may
cause alcohol problems.
Overall, evidence suggests that heavy alcohol users have reduced employment opportunities
(MacDonald and Shields, 2004), although some studies found no significant relationship between
alcohol abuse and employment (Asgeirsdottir and McGeary, 2009). Light drinkers are more likely to be
working compared to long-term heavy drinkers, former drinkers, and abstainers (Jarl and Gerdtham,
2012). Evidence of positive effects of light-moderate drinking is, however, debated due to possible
measurement error and classification of past drinking in studies (Stockwell et al., 2016; Jarl and
Gerdtham, 2010).
Figure 1.7 shows that among people aged 50-59, the employment rate in 2013 is, on average
across 14 European countries, about 70% for heavy drinkers compared to 77% for light-moderate
drinkers. Eight out of 14 countries display lower employment rates among heavy drinkers, while
six countries display the reverse relationship.
An econometric analysis (see endnote 2) exploring the impact of heavy drinking in 2011 on
employment in 2013, based on SHARE data, controlling for obesity, smoking, and chronic diseases,
shows a significant association between heavy drinking and lower employment in women only
(Figure 1.8). All things being equal, among people aged 50-59, 63% of women (79% of men) who drank
heavily in 2011 were employed in 2013 compared to 73% of women (82% of men) who drank moderately.
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Figure 1.7. Employment rate among people aged 50-59, by alcohol-drinking status,
14 European countries, 2013
Light-moderate drinker
Heavy drinker
Employment rate (%)
100
90
80
70
60
50
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ed
la
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it z
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40
Note: N =13 318 in the 14 countries studied. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (wave 5).
1 2 http://dx.doi.org/10.1787/888933428344
Figure 1.8. Probability of being in employment among people aged 50-59 in 2013,
by alcohol-drinking status in 2011, aggregate results for 13 European countries
Light-moderate drinker in 2011
Heavy drinker in 2011
% employed in 2013
100
90
80
70
60
50
40
Men
Women
Note: Excludes Luxembourg because it was not included in SHARE wave 4. N = 1 497 for men and N = 1 777 for women.
95% confidence intervals represented by H. Non-drinkers are excluded. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (waves 4 and 5).
1 2 http://dx.doi.org/10.1787/888933428358
Chronic diseases and related behavioural risk factors also lead to lower productivity,
hours worked and wages
Labour productivity can be measured in several ways, including rates of absenteeism from work
or “presenteeism” at work (that is, being at work while sick, resulting in reduced performance),
reduced work hours, and lower levels of wages. This section examines productivity losses due to
chronic diseases and their risk factors.
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People with chronic conditions work and earn less
Figure 1.9 shows that people with chronic diseases have more sick days than people without any
chronic diseases in all countries but Spain. Among people aged 50-59 who were employed in 2013 and
who reported absence from work in the past 12 months, the median number of sick days is 7 in
people without chronic disease, 10 in people with one chronic disease, and 20 in people with two or
more chronic diseases, on average across these 14 European countries.
Figure 1.9. Number (median) of sick days in the last 12 months among employed people
aged 50-59, by chronic diseases, 14 European countries, 2013
No chronic disease
1 chronic disease
2 and more
Sick days
35
30
25
20
15
10
5
ov
en
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Cz
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Fr
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De
nd
0
Note: N = 12 228 in the 14 countries studied. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (wave 5).
1 2 http://dx.doi.org/10.1787/888933428366
Chronic diseases reduce hours worked and wages. For instance, in the United States, men and
women with chronic diseases worked about 6% and 4% fewer hours than healthy men and women,
respectively, and earned about 6% and 9% less (Pelkowski and Berger, 2004).
Looking at the impact of specific chronic diseases, diabetes may affect the number of hours
worked and the choice of full- or part-time work (Saliba et al., 2007). Evidence on US data shows that
diabetes increases the number of work-loss days by two days per year in women (Tunceli et al., 2005).
Diabetic people also generally earn less than nondiabetic workers (Minor, 2013).
The effect of cancer on hours worked is also significant, with a difference of three to seven hours
less per week for people with cancer compared to cancer-free people (Moran et al., 2011). Cancer
increases work absence. In Canada, 85% of women diagnosed with breast cancer were absent from
work for a four-week or longer period compared to 18% for healthy women (Drolet et al., 2005).
Musculoskeletal diseases are associated with lower productivity. In the United Kingdom,
musculoskeletal problems accounted for 30.6 million days lost, which represented almost a quarter
of the total days lost due to sickness absences in 2013 (Office for National Statistics, 2014).
Mental illness is responsible for a high incidence of sickness absence and reduced productivity
at work (OECD, 2015a). Poor mental health reduces workers’ marginal productivity when they are at
work (presenteeism) and increases the rate of absence or reduces the numbers of hours worked
(sickness absence). US workers lose an average of 1 hour per week owing to depression-related
absenteeism and four hours per week due to depression-related presenteeism (Stewart et al., 2003).
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Mental health problems are a predictor of both short- and long-term sickness absence,
increasing the probability of short-term leave by 10% and of long-term leave by 13% for severe
disorders and by 6% for mild-to-moderate disorders (OECD, 2012). Also, depression symptoms have a
significant and large effect on sick-leave duration, since they account for an additional seven days of
annual sick leave, more so than having two or more chronic diseases, as shown in Figure 1.10
(Knebelmann and Prinz, forthcoming).
Figure 1.10. Additional days in annual sickness absence among workers aged 50-59 due
to depression symptoms, European countries, 2013
Number of additional sick days per year
8.0
7.5
7.3*
7.2*
7.0
6.8*
6.5
6.0
Mobility limitation
2+ chronic diseases
Depression symptoms
Note: N = 13 096.
* 0.1% significance level. See the Statlink for further details on the methodology.
Source: Knebelmann and Prinz (forthcoming). Authors’ estimates based on SHARE data.
1 2 http://dx.doi.org/10.1787/888933428375
The negative labour market outcomes of chronic diseases amplify social inequalities on the
labour market. Women and people with a low education level and blue-collar workers are more
affected by the negative outcomes of chronic diseases on employment (Saliba et al., 2007). Lower
autonomy and higher job demands increase the association of several chronic health problems
(mental illness, circulatory diseases, musculoskeletal diseases, diabetes) with sickness absence.
The total costs of mental illness for society at large are estimated at 3-4% of GDP in the
European Union (Gustavsson et al., 2011). Most of these costs are caused by people with
mild-to-moderate mental illness, the majority of whom are employed. The large bulk of these costs
are not direct costs borne by the health sector and related to medical treatments, but indirect costs
due to loss of productivity and potential output, sick pay, and long-term inactivity – costs borne by
employers and social benefits systems.
Obese people are more frequently absent from work and earn less than non-obese people
Obesity increases the likelihood of worker absence, especially for women (Cawley et al., 2007;
Coudin and Souletie, 2016). Figure 1.11 shows that among people aged 50-59 who were in
employment in 2013, more than half of obese people reported taking 12 sick days or more in the
last 12 months, compared to eight days for non-obese people. Moderately and severely obese
manufacturing workers have lower labour productivity because they experience greater difficulties
with job-related physical tasks and with completing tasks on time compared to normal-weight
workers. In the United States, obese workers’ productivity was estimated to be about 12% lower
compared to that of normal-weight workers (Goetzel et al., 2010).
HEALTH AT A GLANCE: EUROPE 2016 © OECD/EUROPEAN UNION 2016
27
1.
THE LABOUR MARKET IMPACTS OF ILL-HEALTH
Figure 1.11. Number (median) of sick days in the last 12 months among employed people
aged 50-59, by obesity status, 14 European countries, 2013
Non-obese
Obese
Sick days
35
30
25
20
15
10
5
ia
en
ov
Sl
ni
to
Es
la
er
th
a
s
nd
y
an
Ne
rm
h
ec
Cz
Ge
Re
p.
m
iu
lg
Be
ria
st
Au
Av
er
ag
e
en
ed
ai
n
Sw
bo
m
xe
Lu
Sp
g
ur
ly
It a
ce
an
Fr
la
er
it z
Sw
De
nm
ar
k
nd
0
Note: N = 12 091 in the 14 countries studied. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (wave 5).
1 2 http://dx.doi.org/10.1787/888933428382
The cost of productivity potentially lost due to obesity is high. Obese US workers cost an
estimated USD 42.3 billion in lost productive time, an excess of USD 11.7 billion compared with
normal-weight workers (Ricci and Chee, 2005). The loss of productivity associated with presenteeism
is even larger than that associated with absenteeism, accounting for up to two-thirds of the monetary
value of total productivity losses (Ricci and Chee, 2005).
A review of the evidence covering 18 international studies highlighted that obese people earn
about 10% less than normal-weight people (Sassi, 2010). This result was also found in a recent analysis
of the 2012 German Socio-Economic Panel survey: among white-collar workers in Germany, obese
women earn about 10% less on an hourly basis than non-obese women (Devaux and Sassi, 2015). In
Sweden, a study of 450 000 men found an exceptionally large 18% wage penalty associated with obesity
(Lundborg et al., 2010). More recently, in Finland, research concluded that a one-unit increase in BMI is
associated with 6.6% lower wages and 1.7% fewer years employed (Böckerman et al., 2016).
Smokers are less productive and earn less than non-smokers
Smoking increases both the risk and duration of work absenteeism. For example, in Sweden,
a 2007 study found that smokers were absent from work up to 8-10 days more per year compared to
never-smokers (Lundborg, 2007). In a meta-analysis of 29 studies including OECD countries in Europe
and outside Europe, current smokers were found to be 33% more likely to be absent from work than
non-smokers (Weng et al., 2012). High costs of lost productivity are associated with smoking, in
particular due to illness and smoking breaks, higher insurance premiums, increased accidents during
work time, negative effects on non-smoking colleagues, and early retirement. Figure 1.12 shows that
among people aged 50-59 who were employed in 2013, smokers reported ten days of absence due to
sickness compared to eight days for non-smokers.
A comparison between current smokers and ex-smokers showed that quitting smoking can
substantially reduce the risk of work absence (Weng et al., 2012). Smoking cessation can increase
workers’ productivity through reduced absenteeism and enhanced performance at work, and it has
positive impacts on wages (Brune, 2007).
28
HEALTH AT A GLANCE: EUROPE 2016 © OECD/EUROPEAN UNION 2016
1.
THE LABOUR MARKET IMPACTS OF ILL-HEALTH
Figure 1.12. Number (median) of sick days in the last 12 months among employed people
aged 50-59, by smoking status, 14 European countries, 2013
Non-smoker
Smoker
Sick days
20
15
10
5
ia
a
en
ni
Sl
ov
to
Re
h
ec
Cz
Es
p.
s
la
er
th
Ne
rm
an
nd
y
ria
Ge
st
er
Av
bo
m
xe
Au
ag
e
g
ur
ly
It a
Lu
en
ed
Sw
Fr
an
ce
m
iu
lg
la
er
it z
Be
nd
n
ai
Sp
Sw
De
nm
ar
k
0
Note: N = 12 157 in the 14 countries studied. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (wave 5).
1 2 http://dx.doi.org/10.1787/888933428396
Several studies have found that smokers suffer from wage penalties (e.g. van Ours, 2004, for the
Netherlands). Cumulative lifetime cigarette consumption is also associated with lower long-term
earnings. For instance, in Finland, reducing tobacco consumption by five pack-years could be
associated with a 5-7% increase in wages (Böckerman et al., 2014). The relationship between tobacco
use and wage gaps among workers is often explained by smokers’ lower labour productivity,
including frequent smoking breaks, absences due to sickness, and poorer health, resulting in lower
wages (Berman et al., 2013).
Smoking imposes a significant burden on the economy and society through such productivity
loss. In France, the lost production related to tobacco smoking was estimated at around
EUR 8.6 billion in 2010, about the same as for alcohol consumption (Kopp, 2015).
Heavy drinkers are less productive at work and earn less than light-moderate drinkers
Light-moderate drinkers have less absences from work compared to former and heavy drinkers
as well as lifetime abstainers, partly because they are generally in better health. For instance, in
Finland, medically certified absences from work were 20% higher among lifetime abstainers, former
drinkers, and heavy drinkers compared with light drinkers (Vahtera et al., 2002). Similarly, in Sweden,
absences from work were 10% higher among long-term heavy drinkers compared to long-term light
drinkers (Jarl and Gerdtham, 2012). Figure 1.13 shows that among people aged 50-59 who took sick
leave in the past 12 months, light-moderate drinkers reported eight sick days versus ten days for
heavy drinkers, with variations across countries.
Moderate drinkers have higher wages than heavy drinkers and abstainers. The wage gap
between moderate drinkers on one hand, and former and heavy drinkers on the other hand, is
estimated at around 20% in Finland (Böckerman et al., 2015). Moderate drinkers spend more time
with their colleagues out of work and they tend to be in good health, which positively influences their
wages. They have a higher degree of life satisfaction than abstainers and have stronger social
networks. Social and networking skills are important factors in the labour market and can have a big
impact on wages.
HEALTH AT A GLANCE: EUROPE 2016 © OECD/EUROPEAN UNION 2016
29
1.
THE LABOUR MARKET IMPACTS OF ILL-HEALTH
Figure 1.13. Number (median) of sick days in the last 12 months among employed people
aged 50-59, by alcohol-drinking status, 14 European countries, 2013
Light-moderate drinker
Heavy drinker
Sick days
35
30
25
20
15
10
5
ia
en
ov
Sl
Es
to
ni
a
s
la
er
th
m
xe
Lu
Ne
bo
ur
nd
g
y
an
rm
h
ec
Cz
Ge
Re
p.
m
iu
lg
Be
ria
st
Au
e
ag
er
It a
ly
Av
Sw
ed
en
ce
an
la
er
it z
Fr
nd
k
ar
Sw
nm
De
Sp
ain
0
Note: N = 9 927 in the 14 countries studied. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (wave 5).
1 2 http://dx.doi.org/10.1787/888933428406
In France, production losses related to alcohol were estimated at around EUR 9 billion in 2010
(Kopp, 2015). In the European Union, alcohol accounted for an estimated EUR 59 billion worth of
potential lost production through absenteeism, unemployment, and lost working years through
premature death in 2003 (Anderson and Baumberg, 2006).
Ill-health leads workers to premature labour market exit, resulting in increased
expenditures on social benefits
People with chronic conditions are more likely to enter in disability, unemployment or early
retirement schemes
This section examines premature exit from work due to NCDs, through disability pension,
unemployment, or early retirement.
Several European studies, focusing on self-assessed health as an indicator for ill-health and
diseases, have shown that poor health status tends to lead to an early exit from work due to disability,
unemployment, and early retirement (van den Berg et al., 2010). Similarly, having chronic diseases is
a significant risk factor for transition from employment into disability pension or unemployment
(van Rijn et al., 2014).
Based on SHARE data, out-of-work people can be identified as retired, unemployed and
beneficiaries of disability benefits. Figure 1.14 shows the proportion of early retired and unemployed
among people aged 50-59 by the number of chronic diseases they reported in 2013. Generally, the
greater the number of chronic diseases, the more likely people were to have retired early or to be
unemployed. Large variations in levels exist across countries, suggesting that the main reasons for
receiving early retirement benefits are not driven so much by the intrinsic health condition, but more
by the design of these programmes and prevailing labour market conditions.
An econometric analysis3 examined the impacts of chronic diseases in 2011 on early retirement
and unemployment in 2013, adjusting for behavioural risk factors. Results show that chronic diseases
significantly lead to higher early retirement and unemployment among people aged 50-59.
Figure 1.15 Panel A shows that, all things being equal, 16% of men (13% of women) aged 50-59 with
30
HEALTH AT A GLANCE: EUROPE 2016 © OECD/EUROPEAN UNION 2016
1.
THE LABOUR MARKET IMPACTS OF ILL-HEALTH
Figure 1.14. Early retirement and unemployment rates among people aged 50-59,
by chronic diseases, 14 European countries, 2013
No chronic disease
1 chronic disease
Panel A. Early retirement
Early retirement rate (%)
40
2 and more
Panel B. Unemployment rate
Unemployment rate (%)
25
20
30
15
20
10
10
5
it z
Sw
De
S w nm
i t z ar k
er
Ge l and
Ne rm
th an
er y
la
n
Sw ds
ed
E s en
to
ni
a
It a
ly
Sp
Av a in
er
a
Be ge
lg
iu
m
Lu Fr
xe a n c
m e
C z bou
ec rg
h
Re
A u p.
s
Sl tr i a
ov
en
ia
er
la
S w nd
ed
D e
L u enm n
xe a
m rk
bo
ur
Ne Aus g
th tr i
er a
la
B e nds
lg
iu
F m
C z r an
ec ce
h
G e Rep
rm .
an
y
It a
Es ly
to
Av ni a
er
Sl age
ov
en
i
Sp a
ai
n
0
0
Note: N = 17 666 in the 14 countries studied. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (wave 5).
1 2 http://dx.doi.org/10.1787/888933428413
Figure 1.15. Probability of being unemployed or retiring prematurely among people
aged 50-59 in 2013, according to chronic diseases in 2011, 13 European countries
No chronic disease in 2011
1 chronic disease
Panel A. Early retirement
% of retired among age 50-59
25
2 and more
Panel B. Unemployment
% of unemployed among age 50-59
20
20
15
15
10
10
5
5
0
0
Men
Women
Men
Women
Note: Excludes Luxembourg because it was not included in SHARE wave 4. N = 1 510 for men and N = 1 907 for women.
95% confidence intervals represented by H. See the Statlink for further details on the methodology.
Source: OECD estimates based on SHARE data (waves 4 and 5).
1 2 http://dx.doi.org/10.1787/888933428424
two or more chronic diseases are retired compared to 5% of men (5% of women) who have no chronic
disease. Panel B shows that 11% of men (10% of women) with two or more chronic diseases are
unemployed compared to 6% of men (6% of women) without any chronic disease.
HEALTH AT A GLANCE: EUROPE 2016 © OECD/EUROPEAN UNION 2016
31
1.
THE LABOUR MARKET IMPACTS OF ILL-HEALTH
Long-term mental health problems are a major reason for labour market exit, including early
retirement and entering disability schemes (OECD, 2012). In Germany, mental health problems have
been the leading cause of early retirement since 1996 (McDaid et al., 2008). Across European
countries, severe depression more than doubles the odds of labour market exit, after controlling for
other factors (Knebelmann and Prinz, forthcoming) (Figure 1.16). This is the case especially for older
people with more severe depressive symptoms, who are more than twice as likely to exit employment
within four years. No significant difference exists between the impact for men and women.
Figure 1.16. Exit from employment among people aged 50-59 as a function
of depression symptoms, European countries
Odds ratios for quitting job
2.5
2.34**
2.0
1.5
1.26*
1.17
1.0
0.5
0
Moderate depression symptoms
Severe depression symptoms
2+ chronic diseases
(ref.: 0 or 1 chronic disease)
Note: N = 3 485.
* 5% significance level; ** 1% significance level. See the Statlink for further details on the methodology.
Source: Knebelman and Prinz (forthcoming). Authors’ estimates based on SHARE data.
1 2 http://dx.doi.org/10.1787/888933428435
Social expenditures on disability and paid sick leave are greater than unemployment benefits
People suffering from chronic diseases or adopting unhealthy behaviours are more likely to
prematurely exit the labour force to go into disability pension, unemployment, or early retirement.
This transition out of the labour market has a cost for governments through higher payments of
disability benefits, sick leave benefits, unemployment compensation, and early retirement pension.
The burden of ill-health on social spending is important. Incapacity-related spending is higher
than unemployment-related spending. Public expenditure on disability and paid sick leave
represented 1.7% of GDP on average across European countries, compared to 1.2% of GDP spent on
unemployment benefits in 2013.
While expenditure on early retirement and unemployment caused by diseases cannot be
identified from national aggregate data sources, data on expenditure on disability benefits and paid
sick leave collected in the OECD Social Expenditure Database illustrate part of the burden of social
expenditure related to ill-health. Combined public and mandatory private expenditure on disability
benefits and paid sick leave represented 1.2% and 0.8% of GDP, respectively, in 2013, on average across
European countries. Figure 1.17 shows the variation across countries in the share of public and
mandatory private expenditure dedicated to disability benefits and paid sick days as a percentage
of GDP.
32
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1.
THE LABOUR MARKET IMPACTS OF ILL-HEALTH
Figure 1.17. Combined public and mandatory private expenditure on disability benefits
and paid sick leave, percentage of GDP, European countries, 2013
Disability
Paid sick days
% of GDP
4.0
1.0
1.5
3.5
1.9
2.2
0.9
1.2
1.3
1.3
1.8
1.7
1.4
1.6
1.2
1.1
0.7
1.2
0.7
1.4
0.8
0.6
0.8
0.8
1.8
0.6
1.1
1.0
1.2
0.7
1.0
1.1
0.4
1.2 0.3
1.0 0.4
0.6
0.5
1.1 0.3
0.6 0.4
0.8
1.0
0.8 0.4
0.1
1.5
0.5
2.0
1.3
2.5
1.3
3.0
s
nd
th
er
la
ar
De
nm
Ne
la
er
it z
k
nd
en
d
ed
Sw
Sw
an
Fi
nl
ria
Au
st
m
Be
lg
iu
g
n
l
Lu
xe
m
bo
ur
ai
Sp
ga
e
r tu
Po
Av
er
ag
nd
Ir e
la
y
an
ce
Ge
rm
p.
an
Fr
Re
h
ec
Cz
Po
la
nd
ia
y
en
ov
Sl
Hu
ng
ar
m
ng
d
Ki
ak
ov
i te
Un
Sl
do
p.
a
Re
ni
Es
to
ia
tv
ly
It a
La
Gr
ee
ce
0
Source: OECD Social Expenditure Database (2016).
1 2 http://dx.doi.org/10.1787/888933428448
Conclusions and policy implications
This chapter highlights the important effects of chronic diseases and related risk factors such as
obesity, smoking, and harmful alcohol consumption on labour market outcomes. Non-communicable
diseases such as heart attack, stroke, diabetes, cancer and respiratory diseases result in the
premature death of more than 550 000 people of working age each year across the 28 EU countries.
This represents a loss of about 3.4 million potential productive life years, assuming that these people
would have had the same employment rate as the rest of the population. This amounts to a loss of
EUR 115 billion each year (or 0.8% of the EU GDP).
Chronic diseases and related risk factors also have an important economic and labour market
impact by reducing the employment rate and productivity of people living with these conditions.
Based on data from the 2013 SHARE survey, the employment rate of people aged 50-59 who have one
or more chronic diseases is lower than that of those who do not have any. The same is also true for
people who are obese, smokers or heavy alcohol drinkers. The labour market impacts of mental
health problems such as depression are also large: across European countries, people aged 50-59
suffering from severe depression are more than two times more likely to leave the labour market
early. Given the higher prevalence of such chronic diseases and unhealthy behaviours among people
with less education and lower socio-economic status, the negative labour market consequences of
chronic diseases and unhealthy behaviours likely exacerbate social inequalities.
Health and labour market policies can play an important role in reducing the detrimental labour
market impacts of ill-health, and thus contribute to better lives and more inclusive economies. Public
health policies that prevent chronic diseases, and health care policies that are designed to better
manage chronic diseases when they occur, can provide important benefits not only for individuals
but for the economy at large (Devaux and Sassi, 2015). Yet today, EU member states allocate only
around 3% on average of their health budget to public health and prevention (see the indicator on
“Health expenditure by function” in Chapter 5). Further investment in prevention policies targeting
chronic diseases and associated risk factors could help make the workforce healthier and more
productive, leading to substantial economic benefits. Governments can use a wide range of
prevention policies to improve both the health of the population and their labour market outcomes,
HEALTH AT A GLANCE: EUROPE 2016 © OECD/EUROPEAN UNION 2016
33
1.
THE LABOUR MARKET IMPACTS OF ILL-HEALTH
many of which can deliver effective results at a low cost (Sassi, 2010; OECD, 2015b). Some policies
can even raise some revenues for governments, such as taxation of alcohol, tobacco, and
sugar-sweetened beverages.
Labour market policies can facilitate access to paid work for people with physical limitations or
disabilities by: encouraging firms to remove physical barriers to work; providing equal training
opportunities for people with some forms of disabilities; reinforcing employment protection
regulations; and offering work flexibility for early return-to-work. Rehabilitation and training
programmes dedicated to newly disabled people can favour return to work (Weathers and Bailey,
2014). Employment protection policies to limit dismissal and redundancy can counteract the labour
market disadvantages faced by sick or disabled people in Europe (Reeves et al., 2014). Experience
rating of employers for worker compensation schemes can encourage firms to improve occupational
health and safety, for instance through better prevention of musculoskeletal disorders (Lengagne and
Afrite, 2015), but there is need to carefully design such schemes so that they do not provide a
disincentive for employers to recruit employees with higher health risks and to recognise that
some sectors have inherently higher risks. There is also evidence of positive effects from early
return-to-work programmes offering flexibility and appropriate facilities at the workplace to allow
people to continue their usual activities as much as possible following a health problem or disability
(Waddell and Burton, 2004).
Although health and labour market policies are often formulated independently of one another,
this chapter has shown the need for greater intersectoral collaboration. Both labour market and
health outcomes would greatly benefit from improved policy integration.
Notes
1. The list of chronic diseases in the SHARE data includes: high blood pressure, diabetes, cancer, chronic lung
disease, heart problems, stroke, arthritis, and ulcer.
2. This econometric model focuses on the effects of chronic diseases, obesity, smoking, and heavy alcohol
drinking in 2011 on employment in 2013 among people aged 50-59. A logit model was used on data from
SHARE waves 4 and 5 including 13 countries (Luxembourg was not present in wave 4), and accounting for
clusters by country. Employment status is dichotomised as follows: employed versus non-employed (including
unemployed, retired and permanently disabled). Control variables included: age, age squared, marital status,
education level, and country fixed effects. Figures show the predicted probabilities with 95% confidence
intervals derived from the model. Results by country cannot be displayed because of too small sample size.
3. The econometric model focuses on the effects of chronic diseases in 2011 on unemployment and early
retirement in 2013 among people aged 50-59. Unemployment status is dichotomised as unemployed versus
employed, and similarly for early retirement – retired versus employed. A probit model was used on data from
SHARE waves 4 and 5 including 13 countries (Luxembourg was not present in wave 4), and accounting for
clusters by country. Control variables included are: obesity, smoking, and heavy drinking in 2011, age, age
squared, marital status, education level, and country fixed effects. Figures show the predicted probabilities
with 95% confidence intervals derived from the model. Results by country cannot be displayed because of too
small sample size.
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36
HEALTH AT A GLANCE: EUROPE 2016 © OECD/EUROPEAN UNION 2016
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Health at a Glance: Europe 2016
State of Health in the EU Cycle
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Please cite this chapter as:
OECD/European Union (2016), “The labour market impacts of ill-health”, in Health at a Glance: Europe
2016: State of Health in the EU Cycle, OECD Publishing, Paris.
DOI: https://doi.org/10.1787/health_glance_eur-2016-4-en
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